Correlation Between Origin Agritech and CITIC
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and CITIC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Origin Agritech and CITIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and CITIC Limited, you can compare the effects of market volatilities on Origin Agritech and CITIC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Origin Agritech with a short position of CITIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and CITIC.
Diversification Opportunities for Origin Agritech and CITIC
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Origin and CITIC is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and CITIC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Limited and Origin Agritech is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Origin Agritech are associated (or correlated) with CITIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Limited has no effect on the direction of Origin Agritech i.e., Origin Agritech and CITIC go up and down completely randomly.
Pair Corralation between Origin Agritech and CITIC
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the CITIC. In addition to that, Origin Agritech is 2.48 times more volatile than CITIC Limited. It trades about -0.16 of its total potential returns per unit of risk. CITIC Limited is currently generating about 0.03 per unit of volatility. If you would invest 108.00 in CITIC Limited on August 25, 2024 and sell it today you would earn a total of 1.00 from holding CITIC Limited or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. CITIC Limited
Performance |
| Timeline |
| Origin Agritech |
| CITIC Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Origin Agritech and CITIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and CITIC
The main advantage of trading using opposite Origin Agritech and CITIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, CITIC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CITIC will offset losses from the drop in CITIC's long position.| Origin Agritech vs. Mizuho Financial Group | Origin Agritech vs. Mitsui Chemicals | Origin Agritech vs. PT Bank Maybank | Origin Agritech vs. REVO INSURANCE SPA |
| CITIC vs. MEDICAL FACILITIES NEW | CITIC vs. ONWARD MEDICAL BV | CITIC vs. Advanced Medical Solutions | CITIC vs. MAGNUM MINING EXP |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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